Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.
Lochhead v Intact Insurance Company, 2020 ABPC 165
Section B Disability Benefits | Average Weekly Earnings
Edmonton (City) v Gosine, 2020 ABQB 546
Cross-Examination on Affidavit
The Plaintiff was injured in a motor vehicle accident and applied to her insurer, Intact, for Section B total disability benefits. Her claim was accepted, though a dispute arose over how Intact calculated her benefits. The Defendant applied to summarily dismiss the Plaintiff’s claim.
The Court relied on the following summary dismissal authority:
 Rule 7.3 of the Alberta Rules of Court sets forth that a party may apply for summary dismissal where there is no merit to a claim. Section 8 of the Provincial Court Act permits our court to apply or modify the Alberta Rules of Court, where the Act or regulations do not provide “for a specific practice or procedure of the Court that is necessary to ensure an expeditious and inexpensive resolution of a matter before the Court”. In my view, it is appropriate to apply Rule 7.3 on that basis, ie. it is necessary to ensure expeditious and inexpensive resolution of matters before our court.
 The test for summary judgment is set out in Weir-Jones Technical Services Incorporated v Purolator Courier Ltd.. I am required to follow a three-part test:
- Can I make the necessary findings of fact?
- Can I apply the law to the facts?
- Is summary disposition a proportionate, more expeditious and less expensive means to achieve a just result?
 A “novel or unsettled legal issue can be decided summarily where the material facts are not in dispute and the issue can be fairly determined on the existing record”. Selecting the correct interpretation of a policy is well-suited to summary disposition.
The Court also relied on longstanding principles of contractual interpretation with respect to analyzing the wording of the Intact policy:
 This application engages principles of contract interpretation applicable to insurance policies. The principles of contract interpretation applicable to standard form insurance contracts are, as follows:
a) Where the language of the insurance policy is unambiguous, effect should be given to that clear language, reading the contract as a whole (Step 1);
b) Where the policy’s language is ambiguous, general rules of contract construction must be employed to resolve that ambiguity (Step 2). These rules include:
i) The interpretation should be consistent with the reasonable expectations of the parties if supported by the policy language;
ii) The interpretation should not give rise to unrealistic results or results not contemplated in the commercial atmosphere in question; and
iii. The interpretation should be consistent with interpretations of similar insurance policies.
c) Only if ambiguity remains after the application of the above principles can the contra proferentum rule be employed to construe the policy against the insurer, with a corollary of this rule being that coverage provisions are to be interpreted broadly and exclusion clauses narrowly (Step 3).
 Automobile insurance policies are approved by the Alberta legislature so there is an element of statutory construction involved in their interpretation. The meaning of the policy must be determined in its entire context, in its grammatical and ordinary sense harmoniously with the scheme, object and intention of the legislature.
The Court determined that the policy was unambiguous and approved Intact’s method of calculating the Plaintiff’s benefits:
 The parties diverge on their respective interpretation of the policy from this point. Ms. Lochhead says that her “average weekly” gross earnings are to be determined by dividing her “gross” earnings for the 52 weeks by 22 (actual weeks worked). Intact says that Ms. Lochhead’s “average weekly” gross earnings are to be determined by dividing her “gross” earnings for the 52 weeks by 52 (52 weeks in a year).
 The term “weekly” requires determination of the “gross earnings” calculated by the week. That means we need to determine what Ms. Lochhead’s gross earnings of $11,708 were, as reckoned by the week. This implicitly requires division of gross earnings by the week. Average is defined as “equalling an arithmetic mean” or as “the number you get by adding two or more amounts together and dividing the total by the number of amounts”. An “arithmetic mean” is “a value that is computed by dividing the sum of a set of terms by the number of terms”. The term “average”, therefore, requires us to divide gross earnings by another number. Both parties agree that we have to divide gross earnings by another number to derive the “average” “weekly” gross earnings.
 The question is what that other number is. Ms. Lochhead says the divisor ought to be actual weeks worked (22 weeks). Intact says the divisor ought to be 52 weeks.
 In my view, the clear language of the policy tells us what the divisor ought to be. Specifically, the policy says “for the” 4 or 52 weeks “preceding the accident”. The policy accordingly provides us with the denominator that we are to use to determine the “average” “weekly” gross earnings. The denominator is either 4 weeks or 52 weeks. In this case, I find that 52 is the denominator to be used to determine “average” “weekly” gross earnings.
 Ms. Lochhead’s argument that “average” “weekly” gross earnings should be based on actual weeks worked does not give effect to the clear policy language. If the policy language spoke only to “weekly gross earnings” as opposed to “average weekly gross earnings”, Ms. Lochhead’s argument would have more merit as the absence of the word “average” would remove the requirement to determine an arithmetic mean. While Ms. Lochhead sought to limit the term “for the” 4 or 52 weeks “preceding the accident” to only the duration of time that we are to consider to derive the “gross earnings”, I conclude that the language also operates – in conjunction with the term “average” – to provide the arithmetic method by which we are to determine “average” weekly gross earnings. Ms. Lochhead’s argument that the divisor ought to be actual weeks worked only gives effect to the term “weekly”, while not accounting for the term “average” combined with “for the” 4 or 52 weeks.
 Both parties addressed the principle of indemnity. This principle “states that an insured should not profit from insurance coverage”, and “insurance proceeds should restore the insured to his/her pre-loss position, leaving the insured in no better or worse financial position than s/he was in before the loss occurred”. Gaudet v Co-operators Insurance Company of Canada finds that a similar section of the PEI policy “is not an indemnification” because it has “two built-in limitations” including a maximum weekly benefit, and a benefit paid on 80% of “gross weekly income”. I disagree that the relevant section of the Alberta policy is not an indemnification. Rather, my view is that the weekly benefit provided for in Section B, Subsection 2, Part II represents partial indemnification of an insured’s income loss as a result of being unable to work from accident injuries. It is partial indemnification as the limitation in the policy on indemnity proffered under the Total Disability section is that the insured receives $400/week maximum, or 80% of the insured’s average gross weekly earnings, whichever is less. The principle of indemnity is one that is properly considered in the search for intention, and in particular, the “objective of the contract should not be negated … by an interpretation “which will result in either a windfall to the insured or an unanticipated recovery to the insured””. In my view, Ms. Lochhead’s interpretation does not accord with the intention of the policy, which is to only provide partial indemnification for income loss resulting from accident injuries. That said, I do not accept Intact’s argument that Ms. Lochhead is seeking to “profit” from an accident that resulted in Ms. Lochhead sustaining injuries and being unable to work as a result of her injuries.
 I find that the language of Subsection 2, Part II, (1.1)(b) of Section B of the insurance policy is unambiguous, and that I am able to give effect to the clear language of the policy. I further find that Ms. Lochhead’s “average gross weekly earnings” are to be determined by taking her “gross earnings” of $11,708 “for the 52 weeks preceding the accident”, and by dividing those by 52 to derive her “average gross weekly earnings” for the purpose of determining her weekly benefit, which is 80% of her average gross weekly earnings, or $400/week, whichever is less.
As Intact had already paid the Plaintiff benefits, the Court dismissed the Plaintiff’s claim.
The Court commented on the specifics of a cross-examination on affidavit as compared to questioning for discovery:
 As a starting point, I note the authorities are agreed that the scope of cross-examination on affidavit is somewhat less than that of questioning on discovery. Merck Frosst Canada Inc v Canada (Minister of Health), 1997 CarswellNat 2661at paras 3-4, which was quoted with approval in Alberta Treasury Branches v Leahy, 1999 ABQB 829, notes the five main differences:
- the person examined as a witness not a party,
- the answers given are evidence not admissions,
- absence of knowledge is an acceptable answer; the witness cannot be required to inform him or herself;
- production of documents can only be required on the same basis as for any other witness, i.e. if the witness has the custody or control of the document, and
- the rules of relevance are more limited.
 Leahy elaborates on the foregoing by cautioning (at para 23) that:
Thus, cross-examination on affidavit should not be utilized as a gate into the field of examination for discovery; discovery has broader purposes and the concomitant broader scope of relevancy in that context is well settled.
 Although the five points from Merck Frost, as quoted in Leahy, continue to be quoted as part of Alberta law, the third point relating to whether the witness should be required to inform himself or herself, is modified somewhat in what I refer to as the modern approach. This approach is described by Graesser J in Rozak Estate, 2011 ABQB 239 at paras 36 to 37 where he adopts the reasoning of Master Prowse in Dow Chemical Canada Inc v Shell Chemicals Canada Ltd, 2008 ABQB 671 at para 5 and states that the evidence of deponents who are cross-examined can be subject to undertakings. However, as Graesser J says in Rozak, again adopting Master Prowse in Dow Chemical at para 41:
That being said, I am also in agreement with Master Prowse that the Court should be slow to direct that an affiant be directed to inform him or herself after the questioning and provide further answers, and that generally witnesses being questioned on an affidavit are treated differently (i.e. with greater restraint as to undertakings) than witnesses being questioned under Part 5 of the New Rules of Court.
 Master Prowse at para 5 of Dow Chemical concludes:
After a review of the relevant case law, I have come to the conclusion that the Court should be reluctant to direct that undertakings be provided by a party proffering a deponent who is unable to answer all questions put to the deponent during a cross-examination. It should be more difficult to have undertakings directed on a cross-examination than at examinations for discovery. Undertakings should only be directed on a cross-examination where:
(a) the deponent has referred to information or documents in the affidavit, or could only have made the assertions contained in the affidavit after having reviewed the information or documents being sought, or
(b) the undertakings relate to an important issue in the application, and the provision of such information:
(i) would not be overly onerous, and
(ii) would likely significantly help the Court in the determination of the application.
 Further, with regard to scope, Justice Mason in Leahy adopted these comments:
 Both ATB and WEM referred to Ed Miller Sales and Rentals Ltd. v. Caterpillar Tractor Co., et al. , 1981 CanLII 1203 (AB QB),  4 W.W.R. 760 as a leading authority on the scope of cross-examination on affidavits under Rule 314. In that case, Justice Feehan reviewed a number of earlier authorities in this jurisdiction and provided a very helpful statement of the law defining the scope of cross-examination in this context. He noted that cross-examination can be searching, thorough and not bound strictly to the material set out in the four corners of the affidavit. However, Feehan J. also noted that such cross-examination is limited to the issues arising from the affidavit as they relate to the motion to which the affidavit was filed in support.
 Feehan, J. went on to say at page 762:
It must be kept in mind at all times that the reason for the examination on the affidavit is to assist the Court to decide the application, and questions and answers which would not assist the Court and would not be relevant to the determination of the issue on the motion nor question the truth of the statement contained in the affidavit or the credibility of the affiant and are obviously questions that should be put on examination for discovery should not be allowed (page 762).
 In addition, simply invoking the concept of credibility does not turn the deponent into an open book. Of necessity, while credibility is a legitimate foundation for questions, the scope of the credibility inquiry is limited to what is contained in the affidavit itself or, as Justice Borins says in Moyle v Palmerston Police Services Board, (1995) 1995 CanLII 10659 (ON SC), 25 OR (3d) 127 (Div Ct) at page 133, quoted at paragraph 26 of Leahy:
However, to the extent that credibility is a relevant issue, all questions may be asked which tend to expose the errors, omissions, inconsistencies, exaggerations or improbabilities of the deponent’s testimony contained in his or her affidavit. Such cross-examination is intended to challenge the truth or accuracy of a fact deposed to by removing the foundation for the fact. As such, it is intended to neutralize the probative value of the fact. If successful, the result may be to eliminate any contradictory evidence in respect to the fact, thereby making it possible for the motion judge to decide the application. However, a broader cross-examination designed to impeach the character of the witness, such as that discussed in the Rowbotham case, supra, would rarely, if ever, be proper as, unlike a trial judge, a motion judge is prevented from ruling on the credibility of a deponent. [emphasis added]
 Drawing these authorities together, I summarize the applicable principles as follows:
- The scope of cross-examination on affidavit is more restrictive than on questioning for discovery, given the different objectives and purposes of each. The former should not be used as an impermissible gateway to a foray in the latter.
- Having said that, cross-examination on affidavit is not confined to the four corners of the affidavit. The test is relevancy and whether the information sought will help the Court to determine the application before it.
- Credibility is a legitimate field of inquiry in an examination on affidavit, but is restricted to the credibility of statements in the affidavit.
- A deponent may be required to inform himself or herself after cross-examination on affidavit by way of responding to undertakings in circumstances where:
- the deponent referred to or relied upon documents or other information in making the affidavit; or
- where the undertakings relate to an important issue in the application, would not be too onerous to respond to and would significantly assist the Court in its determination of the application.
 These principles, I say, are applicable to the scope of cross-examination on affidavit in totality, which would include determining whether questions objected to should be answered and whether undertakings refused should be fulfilled. It can be readily seen that the key concept underlying these principles is relevance and materiality to the application before the Court.
The Court also noted that some questions asked at an early stage, particularly when the Defendants had not filed their Statements of Defence, would not be permitted until questioning for discovery could take place:
 At this point, the Defendants have not yet filed a statement of defence. They have not conceded that any funds were misappropriated by them from the City, or at least they are not conceding any particular amount. They have not yet revealed what their defence is. To now force them to basically reveal and explain all of their personal financial transactions over the last five years past, in advance of filing a defence and before questioning for discovery, would be unfair to these Defendants. Applying the Dow Chemical framework, compelling this additional disclosure at this point:
- does not naturally arise from the content of the affidavits or even the Form 13s and 14, remembering that these Forms document current assets, not how the assets came into being;
- might, based only on conjecture thus far, relate to the issue of whether these Defendants are likely to dissipate their assets;
- would be overly onerous, not just in compiling the documents but in trying to remember or justify the purpose of every transaction in a bank account; and
- only might, based solely on conjecture thus far, assist the Court in determining the issue to some unknown degree.
 Given, at this stage, the significance of the requested information is based merely on speculation, the Court in ordering this disclosure would be sanctioning a fishing expedition.